In spite of the clear consumer interest in mobile video, the industry needs to resolve several technical issues in order to build a more effective, scalable and monetizable business. Most mobile TV is broadcast free of charge using a terrestrial broadcast technology called ISDB-T. Close to two thirds of all new handsets sold include a dedicated receiver to allow users to tune in the broadcasts and all three of the major carriers — KDDI Corp. (TYO: 9433), NTT DoCoMo Inc. ((ADR) NYSE: DCM), and Softbank Corp. (TYO: 9984 | (USA) OTC: SFTBF) – offer the service.

It’s worth noting today that the 20th anniversary of the Tiananmen Square incidents of 1989 (also known to the Chinese as the June 4th incident) is having an impact on the web. Political ramifications of that specific event aside, it is the Chinese government’s pre-emptive actions to avoid any discussion or protest using key internet tools that are news to us. We’ve regularly commented about the lack of freedom on the internet that China and other countries have, but here’s an excellent example of the negative business impacts directly: the Chinese government has blocked some of the most useful internet services, hamstringing professionals in China, to prevent political repercussions.

As Techcrunch reported earlier, “…Chinese authorities have come down like a tonne of bricks on a number of services including Twitter, Flickr, Bing, Live.com, Hotmail.com, Blogger and a number of other sites.” Perhaps more interesting is one of the users they quote, who says, “The 3 web services I cant live without – Twitter, Flickr, YouTube – are all blocked in China… Cheers, [expletive deleted]“ While some expats working in China routinely use virtual private networks to tunnel around the Great Firewall of China (or as the Chinese know it the Golden Shield project), as the persistent and common government regulation of the internet is often called, for most local Chinese this is beyond reach.

Indeed, there is an organization that exists to track whether a particular service is blocked in China: the Great Firewall of China project purports to be a collective of creatives dedicated to the free internet, who will route your service through their Chinese servers to check the effects.

Not to be outdone by the competition, on May 25th, China Unicom (CHU) announced a deal with the local government in Guangdong Province to invest CNY 35 billion (approximately US$5 billion) over the next 5 years. The investment will be for infrastructure projects, e-government, e-commerce, the information technology industry, wireless broadband networks, rural IT projects, public information platforms, and telecoms information-sharing projects.

Is this massive herd mentality? We’ve all seen it before. One large company starts down a path and their competitors follow because they don’t want to be left behind. Isn’t this the recipe that resulted in the .com bubble in 2000 or the current mortgage banking crisis in the U.S.? Despite massive investments in anticpation of 3G service in China, it will be several years before mobile phone companies begin to see a payback. See Digital East Asia’s post 3G’s Long Road to China.

Samsung Electronics Co., Ltd. (SEO: 005930) announced that it has sold more than one million units of its NC10 netbook – the first time a Korean manufacturer has reached such volume for a laptop. Describing the success of the model – which was launched last October – the company stated “our netbook is so popular that there is a long queue in the factory”. This is truly a milestone, considering that the company entered the PC market in the 1980s and never attained the million unit mark. It is also a rewarding outcome for the gamble Samsung took by launching this 10 inch model when most other netbooks on the market were in the 7-9 inch range. Samsung’s netbooks are not only popular in Korea, but globally as well; the company enjoys an estimated 36% European market share according to market research firm Gfk Group.

Popularity of the netbook is frequently attributed to the product’s low price tag – believed to be particularly attractive to consumers given the current economic environment. With costs a strong concern for manufacturers, it is no surprise that companies are looking for new ways to entice today’s price-sensitive consumers. Taiwanese giant, Acer Incorporated (TPE: 2353), the world’s third-largest PC maker by revenue – behind only Dell Inc. (NASDAQ: DELL) and Hewlett-Packard Company (NYSE: HPQ) – recently revealed intentions of releasing, in Q3 of this year, a netbook that runs the free Android operating system offered by Google Inc. (NASDAQ: GOOG). The president of Acer, Jim Wong, praised the Android system as offering “incredibly fast wireless connection to the Internet”. The company will still offer Microsoft options, but the Android-based model is estimated to shave approximately US$20 off the price.

It has been reported by research firms, including DisplaySearch, that netbooks accounted for approximately one in five laptops shipped globally in Q1 of 2009 – that puts the tally at about six million machines. Geographically, it is estimated that EMEA received about 45% of the shipments and North America took just over 20%. With strong growth and big-name players investing their resources in netbooks and netbook-related products, more headlines can be expected.

The money will go to bolster the local broadband network coverage, better the telecoms network in the rural area, develop broadband applications, speed up 2G and 3G network upgrading, promote mobile telecom applications, and roll out more value-added telecom services.

A spokesperson for the Beijing government says that the massive investment plan is bound to create 50,000 to 80,000 jobs.

Li Yizhong, governor of the Ministry of Industry and Information Technology, said during the signing ceremony that the ministry would stand firmly behind the three telecoms carriers to help them carry out their plans to build up a wireless city and integrate the local networks of broadcasting, Internet, and telecoms. [Source: www.163.com (May 22, 2009)]

This is the latest of many similar deals between the major telecom operators and local/regional municipal governments. These deals are largely a ceremonial occasion. Of course, the Big Three telecom companies must invest and build infrastructure in major population centers. However, it is not lost on the CPC that these investments can enhance China’s economic stimulus package and create jobs (50,000-80,000 in Beijing).

3G has been rolled out domestically for several years and received substantial hype last summer when Apple released the new 3G iPhone. Internationally, 3G has begun to take shape with substantial growth potential in China with telecom giant China Mobile leading the way with the largest wireless subscriber base of 415 million subscribers as of 2008; that’s more people than the whole U.S. population of 306 million people! Even though China Mobile has such a large subscriber base, it has huge growth potential in rural China, which the Chinese stimulus plan should help. The Chinese government has allocated $40 billion to build out the wireless network into rural areas as well as upgrade to 3G.